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Monster player aims to swallow market

Monster player aims to swallow market

The corporate equivalent of Godzilla is casting an ominous shadow over Australian resellers and distributors.

The IT division of the largest com-pany in the world, General Electric's GECITS, recently reported global revenues of over $US7 billion after only four years in business.

According to Mike Shove, general manager alliances, marketing and operations, GECITS Australia, the company locally expects to report revenues in excess of $300 million for the coming financial year.

The local division of GECITS began in Australia less than two years ago after General Electric swallowed flailing local IT services company Ferntree. In that short time, Shove claims the company has managed to generate $220 million in reseller revenues alone, a figure sharply at odds with the company's profile as a professional services provider.

Interesting again is that GECITS was recently named IBM reseller of the year after nearly quadrupling its big blue sales between 1996 and 1997.

Company officials also claim that the group is Compaq's number one reseller in Australia and the top reseller for Hewlett-Packard's PC products.

But wait, there's more - GECITS is also Microsoft's largest licensing partner in Australia, officials claim.

Shove said that local resellers are going to find it tough as companies like GE seek to leverage superior buying power, strong global presence and company name recognition in Australia.

Louis Vellios, marketing manager for Business Computers of Australia (BCA), while surprised at GECITS' figures, claims that his company is still the number one corporate reseller in Australia, and played down any threat to BCA from the new player.

"The thing about Godzilla was that he made a lot of noise and then became extinct," Vellios said.

He added that BCA is on target to report 30 per cent growth for this financial year, and expects to snatch the top spot with Big Blue from GECITS next year.

"We don't feel any pressure because of GECITS."

Shove said that if local companies are to compete, they must read the writing on the wall. The shift towards a value-add model, in addition to online delivery models, is favouring larger companies with the capital and infrastructure to invest.

"There is a strong drift towards rationalistion in the channel, as multinationals assert their dominance amongst corporate buyers," Shove said.

Shove also believes that for smaller Australian companies, it is no longer viable to be strong in your home state alone. "Resellers must become national or be very focused on service within a tight region," Shove said.

GECITS recently opened a 3000sq m distribution and configuration centre in Melbourne, which officials claim will allow the company to configure 200 PCs a day.


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